Friday, 11 December 2015

With equities closing significantly lower, the VIX soared into the weekend, settling +26.1% @ 24.39 (intra high 25.27). Near term outlook offers a little further higher, but post-FOMC, the VIX looks set to get ground to the low teens by year end. Across the week, the VIX gained a rather extreme 64.7%.

VIX'60min

VIX'daily3

VIX'weekly

Summary

Suffice to add.. the weekly close above the key 20 threshold is a surprise.

It would seem the market is seeing a rather powerful washout ahead of the FOMC, and which should counter rally after rates are raised.
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US equities closed very significantly lower, sp -39pts @ 2012 (intra low 2008). The two leaders - Trans/R2K, settled lower by -1.9% and -2.2% respectively. Equities look set to rebound after the FOMC is out of the way.

sp'60min

Summary

... and another wacky week in the world's most twisted casino comes to an end.

With oil losing around 10% to the $35s... and increasing concern about liquidity in the credit/junk bond markets, it sure was a moody end to the week.

Considering today's action, a washout of the sp'2K stops would be very natural next Mon/Tuesday.. before pushing higher.
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Clown finance TV reporting on bond man Gundlach...

No doubt, he won't be the only financial name across the next few days who will be trying to convince the Fed to back off again.

I hold to the view though, that if the Fed back off, the market will get hugely upset (if not initially) at continued uncertainty in early 2016, and unravel...breaking the Aug' low of sp'1860.

If there is one thing the market can't stand.. its uncertainty.
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Downside to the sp'1500s?

It has been kinda interesting today to see a few of the more bullish cheerleaders/analysts on clown finance TV effectively talking about downside under the Aug' low. The sp'1500s would be the most natural target in any collapse wave next year... but there is ZERO doubt.. were that to happen.. the Fed would launch QE4.... and we know where prices would trade then... right?
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Regardless of the exact close, all US indexes are set for rather severe net weekly declines of 3-5%. The VIX is fully reflecting the increasing anxiety ahead of next Wednesday's FOMC, +22% in the 23s. Might the fed aim for a compromise, with a 10/15bps increase, rather than a 'monstrous' 25bps?

sp'weekly1b

Summary

... am getting a little tired.... thank the gods.. its almost the weekend.
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notable weakness...

miners, FCX

If things do get nasty in 2016.. FCX would be one of the names on the 'might disappear' list. I'd imagine Mr Icahn would fiercely disagree though.
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3.20pm.. new intra low.. sp'2011.... as there is simply no real support until the psy' level of 2K.. and then price cluster zone of the 1990s.

VIX +27% in the 24s... with the 2x TVIX/UVXY net higher on the week by around 50%.

US equities remain significantly lower, with the sp -33pts @ 2019 (intra low 2013), and VIX +27% in the 24s. All US indexes are set for severe net weekly declines of around 4%. There remains further viable downside to the sp'2000/1990 zone.. and that will likely equate to VIX in the high 20s.

sp'60min

VIX'60min

Summary

So... a bearish end to the week... with the VIX clearly set to close above the key 20 threshold. That in itself bodes for further weakness next Mon/Tuesday.. ahead of the FOMC.

The only issue is how the Fed will react to this weeks upset. No doubt some of them will be real twitchy this weekend.

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Meanwhile... speaking of an Apocalypse...

I'm not sure Sansa Stark is going to fit into this movie. Further.. Apocalypse himself sounds almost exactly like Ronan the accuser from Guardians of the Galaxy. Hell.. they're also both blue!

Why are so many of the bad guys blue these days? Whatever happened to devilish red?

With the Nov'16th low of sp'2019 failing to hold, the door has opened wide to further downside... to the 2000/1990s... which will likely equate to VIX in the 25/28 zone. Oil continues to keep the market under pressure, -2.8% in the $35s.

sp'daily5

VIX'daily3

Summary

Q. So.. what are the maniacs at PRINT HQ thinking right now?

We're now set for a net weekly decline of almost 4% for some indexes... as the Fed are now facing market pressure to back out.

Unquestionably though... if they back off again... the outcome would be likely far worse than raising.

US equities break a fractional new intra low of sp'2020, as the market remains under pressure from a number of areas, not least Oil, -2.2% in the $35s. VIX is naturally holding sig' gains, +14% in the 22s. A weekly close above the 20 threshold looks increasingly likely, and that bodes for further weakness Mon-early Wed'.

sp'60min

VIX'60min

Summary

Clearly... if 2019 fails to hold... then its a straight run to 2000/1990 next Mon/Tuesday.

The sp'500 is battling to solidify a floor of 2021, which is close enough to count as a test of the Nov'16th low of 2019. VIX has so far maxed out at 21.87. Oil remains very weak, currently -1.3%.. having broken a new low of $35.78, as many analysts continue to seek the $32s.

sp'60min

VIX'60min

Summary

Well, it sure ain't pretty... as we're another day closer to the fed raising rates.

On balance, this is still very likely just the market washing itself out, before a multi-week up cycle into 2016. I realise though, some of you are seeking a break <2K, with a major upset into year end, via 'credit market' problems.

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notable weakness...

AAPL, -1.7%

.. but so far.. holding just above rising support. If the main market does ramp after the FOMC, then the $130 threshold remains a very valid target.
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US equities open sharply lower, breaking well below the Wed' low, into the sp'2020s. Next support is the Nov'16th low of 2019. With the VIX in the 21s, the market mood sure isn't great... not helped by Oil -1.4% in the $35s.

sp'60min

VIX'weekly

Summary

*the weekly VIX chart is offering the 25/28 zone next week... but more on that later.
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Its turning into a real ugly week, as the Wed' morning high of 2080 is now looking a long way up. All indexes are set for sig' net weekly declines.

No doubt, some will be putting on crash-hats for next weeks FOMC. I'm not expecting any sustained action <2K, but with each 1pt lower... the end year target becomes ever more difficult.

For now.... a floor around 11am looks probable... then minor rally to settle the week in the 2035/40s zone.

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time to shop... back soon

10.30am.. A distinct bounce from sp'2021 to 2032... rest of the day... probable chop.. settling in the 2035/40s.

Gold has seen a notable swing from -$6 to +$5... and that is helping the related miners.. GDX +1.5%

Good morning. US equity futures are sharply lower, sp -18pts, we're set to open around 2034. The USD is -0.1% in the DXY 97.80s. Metals are weak, Gold -$6. Oil is -0.3%, having broken a new low of $36.12

sp'60min

WTIC oil, weekly2

Summary

*Oil is set for a very severe net weekly decline of -9% or so. Sustained action >$50 looks unlikely next year, not least as the supply issue remains completely unresolved.
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So, we're likely going to break the Wed' low of 2036.

Price structure is offering a large descending wedge... in theory... we shouldn't go much below 2035 or so.... before price churn into the weekend.

It is depressingly lame to see clown finance TV so concerned at the pre-market declines, that they've brought on the Cramer for emergency coverage. Naturally, one of the leading market cheerleaders - Cramer of CNBC, is now upset, claiming that the jobs data was too good!

Yes... let there be NO doubt, the cheerleaders don't want good data.... for the 0% money from the Fed might actually come to an end.

Again, its also the same old thing of.. if the market has a few net daily declines, everyone starts getting rattled.

... no doubt Yellen is watching the market... and looking for an excuse to back off. Sub 2K would probably do it.

Despite extensive price chop around sp'2050 this year... there is still viable upside to the sp'2150s before year end. The bigger weekly/monthly cycles both offer upside of around 5% from current levels. The only thing that could wreck a bull party into year end... remains the Fed.

sp'weekly1b

sp'monthly

Summary

Suffice to add, note the upper bollingers... both weekly/monthly cycles allow the 2150s in the immediate term... and right now.. .that remains my upside guess.
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US equities closed moderately higher, sp +4pts at 2052 (intra low 2045).
The two leaders - Trans/R2K, settled higher by 0.6% and 0.3%
respectively. Near term outlook is for increasing price chop ahead of
the Dec'16th FOMC. From there, first target remains 2115/20, and then
the 2150s.. before year end.

sp'daily5

Trans

Summary

Little to add.

A bit of a choppy day... with the sp' seemingly stuck between the 2070s and 30s. Sustained action >2080 looks unlikely until the FOMC is out of way.

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